By Michelle Glass, Multifamily Investment Broker, Denver
Date Published: May 2025
The migration boom narrative was simple: people fled dense, expensive coastal cities for space, affordability, and sunshine. Texas, Florida, Arizona, and the Carolinas became investor darlings. Rent growth surged. Developers raced to entitle land. Multifamily valuations shot up. Everyone—operators, syndicators, capital sources—bought into the same thesis: people are moving, and they’ll keep moving.
But in 2025, that narrative needs a second look.
The question isn’t whether migration occurred. It did. The question is whether we’re still underwriting like it’s 2021—and ignoring the gravitational pull of economic friction, tenant burnout, and overbuilt pockets.
Migration: Yes, But Not Everywhere, Not Equally
Let’s start with the data. According to the U.S. Census Bureau’s 2024 American Community Survey:
- Net domestic migration to Texas, Florida, and North Carolina remains positive, but has slowed from pandemic peaks.
- Colorado, Utah, and even parts of California have shown renewed net inflows.
- High-growth metros like Austin and Phoenix saw in-migration drop by 15–20% compared to 2021.
What happened? Several things.
- Affordability eroded. Rents rose faster than wages in nearly every Sunbelt city. In Austin, average multifamily rent jumped 30% from 2020 to 2023. By late 2024, effective rents had started to decline as tenants hit cost ceilings.
- New supply surged. As of Q1 2025, over 650,000 multifamily units are under construction nationwide (RealPage). The vast majority are in the very cities that saw pandemic-era in-migration spikes.
- Lifestyle friction emerged. Many movers discovered their new city wasn’t cheaper—it was just newer. Traffic got worse. Schools got crowded. And the promise of permanent remote work started to fray.
Migration didn’t stop. But it recalibrated.
Rent Growth Reality Check
In 2023, 14 of the top 20 U.S. metros posted negative year-over-year rent growth. In 2024, most stabilized—but growth was flat to low-single digits.
What does this mean for multifamily investors?
- The assumption of perpetual 5–7% rent growth is broken.
- Expense inflation—insurance, taxes, labor—is outpacing revenue in many Class A and B assets.
- The risk is no longer just lease-up. It’s hold period cash flow.
That’s a very different investment profile than what syndicators pitched three years ago.
A Word on Resident Quality
One under-discussed trend in Sunbelt multifamily? Resident quality is slipping.
Eviction filings in core Sunbelt metros rose by 24% in 2024 (Eviction Lab). Tenant churn is increasing. Credit scores are flattening. And residents are price-sensitive to a degree not seen since the Great Recession.
That doesn’t mean the demand isn’t there. But it means underwriting needs to reflect:
- Higher economic vacancy assumptions (7–10%)
- Longer downtime between tenants
- Greater emphasis on renewal retention
Flight to Lifestyle: The Bifurcation Within the Boom
Even within high-growth markets, demand is bifurcating.
Tenants aren’t just chasing cheap. They’re chasing value.
- Properties near job centers, with community amenities, modern finishes, and responsive management still lease quickly.
- Cookie-cutter units in overbuilt corridors with no real place identity are sitting.
This isn’t a geographic issue. It’s a product-market fit issue.
What This Means for Brokers and Investors
If you’re in multifamily right now, you have to ask harder questions:
- Are you investing in a market—or a submarket that has already peaked?
- Are you underwriting rent growth—or just hoping for it?
- Are you pricing on comp sets—or effective performance?
Deals still pencil. But only when:
- Basis is right
- OpEx is real
- Management is proactive
- Value-add is actually needed, not just cosmetic
Final Thought: We’re Still Growing—Just Differently
Migration was never permanent jet fuel. It was a boost. But gravity returns.
What will define this cycle isn’t raw population growth. It’s operational excellence, market nuance, and underwriting discipline.
Multifamily is still strong. But the smartest players aren’t betting on momentum.
They’re building for gravity.